3. Next session: Mr. Shinya KISAI (JapanTraining#6)

I have already distributed my information in English, but because of
the time constraint, let me skip it. Let me just say that I am sixty
years old. My hobby is climbing up mountains. I have a plan to make a
visit to Nepal on the 24th of October for trekking of the area very
close to Mt. Everest. About one month ago, I attended an academic
meeting in China, and I visited a number of places including Shinzen
and Amoy. I heard some of you came from Mongolia. I've been to
Mongolia twice in the past. That was in order to attend the Mongol
academic meeting. I was invited by the universities. I have worked for
Fuji Xerox for the past 34 years. For many years I've worked as a
system engineer, and eventually I managed projects. At the present
moment, I became the president of a company after I decided to be
independent from Fuji Xerox, and I give consultations like this.

Overview

I have three things to talk about. The first is how the Japanese
software industry makes progress and what will be the view of the
future. The second is IT projects, issues and problems. Third point is
the important of communication skills, which will be extremely helpful
for you if you want to work as engineers within this kind of business
environment. In Japan it's said that people are beginning to realize
the importance of communication skills. When the new graduates try to
apply to many different organizations, one of the criteria for hiring
is the communication skill. 20 years ago, one of the priorities of the
company for hiring was how well the person can work together with
other people. However, 10 years ago, this criteria changed. Companies
began to seek people with creativity. Nowadays, communication skill is
one of the top priorities.

History

In order for you to either work in Japan or work with a Japanese
company, it is helpful to know the brief history of how computers have
developed from old days. The first computer in Japan with the name of
Fuji was manufactured by Fuji Film in March 1956. Fuji Xerox, the
company I used to work for a long time, is a subsidiary company
belonging to Fuji Film. Around 1957, there were many numbers of
computation centers established in Japan. Most of the computing
centers were using the IBM computer. At that time, there were many
computing centers using domestic computers manufactured by Toshiba as
well as Fuji. I was engaged in this kind of business sector from 1965.
1965 was about the year when the Japanese banks implemented the
first-generation online systems. During the end of 1969, the first
software company was established in Japan. At the present moment, we
have several tens of thousands of companies dealing with
software-related work. Breakdown of what kind of work these companies
are dealing with... Government-related work is 58.8%, computer maker
is 21.4%, and general use is 19.8%. In 1970, IBM made the official
announcement for the unbundling policy. (Slide 5)

The result of this announcement of the unbundling policy, many new
companies emerged in the market. This is the breakdown of the
companies who are doing business in software-related work in the
1970s. (Slide 6). This is the slide showing the hardware companies.
(Slide 7) In the middle column are the domestic and export totals.
Beginning from 1970s, Japanese computer-related technology as well as
performance has started to increase and improve.

This is after 1975, many of the computer's technologies have
dramatically improved. So I was involved in the implementation of the
LAN system into the market. The market made great change in 1995 when
the Windows 95 was first introduced to the market. Also, the market
went through another great change when the first mobile phone was
introduced into the market in 1995. This is the history of how the
information industry made change. While we started information
industry started for providing work for the government-related work,
then went into manufacturing, then finance, then logistic and
distribution, then communication, now we seem to be aiming for
electric government or the person. But there are still a lot of
question marks. We aren't quite sure where we are going.

As Mr. Kiniyama mentioned during his preesntation, the Japanese
software industry is facing a very difficult business environment at
the moment. At the present moment, we have several thousand operators.
(repeats statistics from slide 11). The total turnover (global
turnover) is about 70 trillion yen. As I said, at the present moment,
about 570k people are engaged in software development work. In China,
around same number of people graduate from institutes and go to obtain
jobs in IT industries. Chinese influence is beginning to be very
strong here in Japan.

Problems facing the software industry

Custom-made software

We have a number of the issues related to the software industry in
Japan. One of the difference between Japan and European and American
markets is that custom-made software is necessary. Most European and
American companies prefer to use packaged software. That is why, since
you have to make everything from scratch, the cost of system
development is becoming too high. Another unique form of employment,
especially when it comes to software development engineers, is that
normally you will be asked to work at the client's company, not in
your own.

Stratification

Another problem is that software industry is facing this stratified
system. You have the parent company, then the subcontractor, then the
second tier, then the third tier... The added value is considered to
be very small, so manhour has not been correctly evaluated. The reason
because Japanese people as well as Japanese companies fail to provide
information. Even the service is important. People are expected to pay
for this service. This is the problem derived from the company who
place the order as well as the company who receive the order. Their
relationship cause the problem. In the case of software industry, most
of the people working have great knowledge of engineering and
technical skill, but you don't know much about selling and sales kind
of knowledge. I'm sure you will immediately detect this kind of
disadvantages once you go to host companies and try to receive
training there. Most of the software companies in Japan are considered
to be either small or medium-sized companies. As I said, we have total
number of slightly more than 7000 companies in software development.
six000 employ less than 100 workers. 100 million yen capitalization or
less, 5000 companies. Software development become border-less,
including (list of countries).

These are the top 20 companies listed in here. (Slide 13) The top 20
major software giants control at least 70% of all the turnovers
coming out of this industry.

Global competition

I'd like to talk about the issues and problems relating to the
information technology industry in Japan. Obviously, issues and
problems common to all for the IT business can be divided into three
different categories. Sales on the left-hand. In the middle is
development activity. On the right is the supporting activity. There
are many number of the sisues and problems coming out of these
development activities. One of the biggest difficulty in the Japanese
software industry is facing is very severe competition from Chinese
and Thai software industries. The labor cost from China is said to be
1/10th that of Japanese labor. But Chinese labor price is going up
little by little. They are still 1/3 compared to Japan when it comes
to labor cost. Especially in major cities like Peking, and Shanghai,
this labor price is going up slowly. So since the Chinese labor price
is going up, now the focus will be Thailand, India, and elsewhere.
That's why the needs of Japan and what you can provide seems to be
coinciding. Maybe your labor cost will also go up accordingly. You
have to take account of infrastructure and other factors.

Surprisingly, there aren't many Indians working for IT business here
in Japan. It seems that Japanese companies prefer to work with China
and SE Asia countries. At the present moment, IT business-related
companies' focus is shifting toward stringent activities focusing on
sales. Also to provide a much more strict control on project
management work than before.

Services

There is a great movement which started to take place from recent
years is the shift from hardware to providing the services. And also
the people beginning to think it is important to provide good
consulting work, focusing on sales skill as well as the skill to
provide proposals and skills to your clients.

The second is the project issues and problems.

Project management

How many of you have involved yourself in the project? Please raise
your hand. In Japan, people are starting to pay attention to how
important to look after management of the project is. We call it
project management. So project management means that you are not asked
to just develop a certain technical engineering system, but
involvement of human factors is becoming to be considered very
important. People skill. So in order to carry out the project, you
will always confront three goals. You have to keep it within the
budget. You have to deliver the project on delivery time which you
promised. As well as you have to have a good outcome. So that's why
you as a human being you need to establish a good plan and provide a
good execution and provide a good control of your project. But most
projects don't go like that. Here I wrote three characteristic of
carrying out a project. These three elements I have taken out from the
PMBOK (Project Management Body of Knowledge). It's a project
management association. Delivery date, service in product which is
unique to your own company, and you will try to provide a detailing of
the work phase by phase.

Allow me to skip...

Time, cost and scope

When you talk about the project, there are so many different kinds of
projects which exist. Most of the software company dealing with the IT
industry, we try to deal with the development of information systems
as well as the development of networking systems. These are the main
focus of our business. So allow me to give you a definition for the
terminology of project management. Project management is in order to
provide satisfaction for the items that were requested by the
customer. You need to apply the activities, including the
technological skills and methods. Whenever you will execute a project,
you will face the three constraints: time, cost, and scope (the
outcome of the product as well as the quality of the product). So what
normally happens in the market is that your initial work is considered
to be that gray small pyramid. As your project progresses, you will
receive the request from your customers, and the size or cost of your
project is likely to inflate. The problem most of us is facing is that
obviously the scope and size of the work has expanded as you can see,
so naturally the time and working hours and cost will likely increase.
However, it is the matter of negotiation between the software industry
and the customers how you are going to charge this extra cost. If you
are not doing anything clever, then your project will end up as a
project making absolutely no money. In some cases you will make red.

Lifecycle

So this chart contains the so-called lifecycle of a project. On the
vertical line shows the availability of manhour cost against the
horizontal line, which shows the time. In the midphase, your manhour
cost is most likely to reach quite high. At the end of the project,
that manhour cost will almost become 0. This particular chart (23)
shows you the incident of emergence of number of the risks in dottled
color red line, and inference coming out of these risks are used with
the blacking dotted line. In order to interpret this particular chart,
the risk is most likely to take place at the initial stage of the
project. The risk is most likely to be dissipated at the end. However,
the inference coming out of the risk will become serious toward the
end of the project. These three bombs show you that you are most
likely to come across risks in the beginning. If you have too many
risks, your project is most likely to fail at the end. In order to
carry out successful project management, most important thing is to
how you will make the forecasting of how many, what kind of risks you
may experience at the start of the project. Risk coming out from many
different areas. There are many different types of risks that you may
face. So if you want to determine the performance or skill of the
project manager, think of how much the project manager can see how
many risks there are.

Sample failures

So from now on, I would like you to share some of the failures we have
experienced.

What is the failed project? Are you familiar with the Japanese TV
program called Project X, from NHK? In Japan, we have two different
categorization. If the project make a success, we will call it Project
X, successful. If failed, batsu or peke. So many people say that
failed project, but the definition of the failed project is somewhat
ambiguous. Allow me to give you the definition of failed project.
Failed project is in case you are unable to deliver the requirement
from your customer in terms of Quality, Cost and Delivery, that is
definetely a failed project. If the company fails to make a profit,
that is also a failed project. However, generally speaking, the people
most likely to be referring to a failed project would be the project
that does not bring profit to the company.

This is the success rate and failure rate of projects in Japan. (28).
How many of you have had a success rate of what? Out of more than a
few hundred project numbers, at least 73.3% are failures. As you can
see, majority of the projects ended up as a failure. From now on, I
will share with you a number of the failures that someone I know
closely has experienced, including myself.

I only wrote down the six, but there are so many more.

Production management

This is the actual example of failure which we experienced in the
manufacturing industry in the production management area. The status
was that software development manhour was dramatically increased. It
didn't say the actual numbers in it, but this project was about 50
million yen to start with. However, the project manhour was
dramatically increased, so it ended up as 75 million yen. There were
number of reasons for the failure. First one is the so-called internal
reason, which was the relationship between system engineers and the
sales department. External reason is that the customers came up with
different requirement from different department, so the customer's
requirement was not unified as one. And another third reason is that
the client size, each different department keep coming up with
additional requirements one after the other. As a result of that, the
project should have been completed within 50 million, but the software
development company spent 75 million yen. Lessons learned: one of
them, just because the client give you some order or requirement using
strong attitude, don't listen to him. You have to understand the
essence of the project. Another thing that we have learned is that we
needed to understand the system within the customers. What kind of
project operating system, what kind of responsibility is in the hands
of whom... These details we need to understand. As I said on the third
external reason for the failure is that customers keep on adding
additional requirements. Just because you are facing the delivery
time, if you decide to pour additional engineers, project will not
necessarily be finished as a success. That doesn't solve the problem.
This kind of problem will be derived from the communication among the
people.

Sales management

Second example of project failure is from the commercial side, when
the sales management system failed. This was an example of receiving
the ... for the finished product, which we delivered to the customer.
However, this finished software did not meet the requirements of the
customer. This was not a large-scale project. It was quite a small
size, about 20 million yen budget. One of the reason was the internal
reason. The person who worked within the sales department made his own
judgment and decided to place the order using external vender to carry
out the software development work. Since then we have so many
different kinds of companies engaged in software development work, you
have to have eye to analyze and evaluate to whom you want to give the
order to. If the sales person make the final judgment based on the
cheap price, then he or she may end up with receiving the software
that comes without any document, or the contents of the software
itself is extremely poor or low-quality. We have a saying here in
Japan, you buy cheap thing and you lose your money. So this is the
kind of lesson we have learned from past company.

Engineering management

Third example comes from engineering management. This was quite a big
project, with a budget of 100 million yen. The production cost went
out of the way because halfway through the project, the client came up
with extra requirements, and software company couldn't make a stop to
it. So the external reason, the project wasn't properly functioned
within the customer's company. Because this is the kind of typical
failure you may experience in Japan since most of your customers
aren't professionals, they don't know anything about system
development. So the lesson that we have learned is that once you know
the customer or the client, they don't have any kind of system to deal
with the project, you have to maneouver the battle airplane with a
single engine. And second lesson we have learned is that you need to
clearly divide the responsibility. What kind of responsibility are in
the hand of the client? If you are just told what to do, the customer
wants you to do everything. You shouldn't say yes all the time. You
should divide the responsibility. This kind of failure is most likely
to derive as the start-up of project management is taking place and
the work breakdown structure is not successfully defined. So you must
not do anything which is not stipulated in the work breakdown
structure. Well, it is quite true to say how the minds of your client
or customer work is that they often say to you, since you are the
professional, you have 100% responsibility, do what you think is best.
But that is a trap. You are most likely to fall down later on. This is
where the difficulty lies.

Engineering technical management

The fourth example. This is the engineering technical management
system to be used for precision machinery sector. We do not have many
failure like this in the past. We received the complaints from the
customer because the function and performance did not meet the
customer's requirements. The reason for the failure came from the
internal reason. People gave the overtalking. It was insufficient
technical specification as well as verification for engineering
feasibility was not sufficient. The lesson learned is that we need to
fully understand the needs of the customer so that the company can
lead the client in the right direction, and also to say what you can
do and what you cannot do--these have to be directly conveyed to your
customer. And also that you must check at all times what you can
provide and what the customer needs on a regular basis.

Manufacturing technology system

Fifth example is manufacturing technology system used in the product
making industry. This is one of the example coming from one of the
major automobile manufacturers in Japan. This project was the new IT
system to be used as a start-up of building new factory. So their
status was that the customer specifically required a particular
technology, a new advanced technology to be used for this development.
Unfortunately, the technology was too new. It was not mature enough to
use on a practical level, which is why the delivery was delayed for
five months. One of the reasons for the failure came from the internal
reason. The software development failed to carry out verification from
the technological point of view. And unfortunately, another internal
failure reason, this project was managed by a project manager who was
also looking after another project. So another external failure came
from that this particular customer had a great interest in new
technology, but when it comes to development of system, that company
has absolutely no knowledge. The main contractor also had no
experience, especially in the information field. So the main
contractor virtually threw the project to the software development
company. The major lesson we have learned is to make sure to carry out
verification before you use any engineering technologies. And another
important factor we learned is to make sure we identify the
responsible system looking from the total project management view.
Also, the project manager should have responsibility until the very
end. This was quite a fortunate case because all involved party
including the client company and the main contractor as well as the
vendor responsible for the system, every party admitted their own
fault, so nobody had to pay any penalty.

Manufacturing

This is the last example. This is the system management development
for the manufacturing industry. The delivered software had so many
troubles. There was the reason for too many trouble after software was
delivered. The initial requirement asked for delivery in an absurdly
short time, because the client side has the specific internal reason
that they need to receive the software in a very short period of time.
So this was the external reason. The responsibility is in the hands of
the customer, because they had a double standard. The customer said
this is just the test version, but they actually meant a real version.
The development company realized they had more time. That was entirely
an internal reason. The double standard derived from the very serious
management problem inside the company. This is again another example
from one of the major automobile companies in Japan. The software
company made 300 million yen deficit. It's a very huge damage. The
three things we have learned from this severe experience is that even
facts that needs are coming out from the customers, you must not say
yes all the time. If you believe there are risks, you must provide
serious control or management of these risk-related elements. You must
always have discussions with customers with minutes or memoranda every
time you meet with a customer.

Summary

So these kind of mistakes or the experience is taking place in daily
basis here in Japan, between the companies and the clients. In order
to avoid all these things, that is why you need to acquire
communication skill.

Reason for the all the common failures are written on this page
(thirty-six). You did not have the eye to clearly understand the
requirements from the customer. Business analysis was not sufficient.
Over-talking during the sales. Technology? was not appropriate. Dev
manhour forecasting was not accurate enough. You have made a mistake
in choosing outsourced vendor. You could not deliver your product.
Insufficient sales engineer leadership. Insufficient project
management capability. No infrastructure to promote the project within
the customer's organization. We spent too much cost to clear all these
problems.

Here is the tendency for the failed project. For some cases, you try
to put on your jacket, and the top of the button doesn't match. You
made the mistake from the very beginning. Incompatibility in the
business. Mistake in forecasting. You didn't notice the number of the
risks. Insufficient infrastructure for the management as well as the
system. All these elements will eventually take you to making
failures.

How to make your project a success

Up until now I have spoken about project management looking from the
personal point of view. However, in order to make a success out of
your projects, you need to tackle the issues looking from the
organizational point of view. In order to make the successful project,
you need to make your organization's maturity to bring up to a high
level, including you need to have the body to provide support for the
strategy, and your top management team has to have management skill,
as well as some kind of standardization or methodology to carry out
the projects. In the future, you may become managers or management
team members. In that case, you cannot on your own achieve anything.
You have to have the organizational power in order to be used to
execute your projects. Having that in your mind, you can participate
in a project. In Japan, whenever a project seems to fail, the people
point finger at each other. The project failed because of that
particular person. In order to avoid that, you have to protect
yourself by establishing logical thinking using the organizational
power. So this is the issue for companies is to provide much more
stringent control and management of the strategy for project
management work.

Shall we have a five minute break?

(You will obtain the English translation later on, so you do not need
to translate by yourselves.)

Factors

So allow me to continue. From now on I will like to mention the
presupposition for making the project a success. In order to make a
successful project out of it, you should not depend on human factors
alone. This is the organization and system, mechanization and rule,
funds and resources, information, human resource and skill. This is
most important factor: human resource and skill. The first thing you
are asked to do is provide most stringent control for human resource.
This is universal. This concept applies to everybody. In order to make
a successful project, you have to divide clearly into management side
of project and operational side of project. Also, you need to think
deeply about what kind of responsibility and authority is given to a
project manager. Often, if the PM is not given sufficient authority,
that project is likely to fail. Depending on how much authority the
organization is willing to provide to the project manager, the project
might not work. The degree of authority depends on what kind and what
size of project you are dealing with. It is important to place the
emphasis on the project charter in which you will appoint a certain
person to be the project manager. Often, in the case of Japan, the
selection of project manager is determined verbally, not using
documents. Often, you will caught with the problem if the project
manager's assignment was carried out without clear order document.

Constructing a project team

How to construct a so-called project team. You need to establish the
organization that will meet the targets and objectives of a particular
project. And by establishing that, you will need to procure the
necessary resources, including the human resource. And also you needed
to clarify what kind of rules and what kinds of methods you will be
willing to use for this project, as well as clarifying the degree of
responsibility as well as authority for different people. In order to
carry out the project management looking from the organizational
structure elements, it sort of works, quite similar with the
management activities. Person, product, management, information... So
what will be the difference from the project against normal
organizations? The project is going to be worked with a special budget
and responsibilities. It's a single shot project using the matrix.
However, when you define the normal organization, the definition will
go like this. They have the periodical budget and you will employ the
similar kind of person and the work is continual as well as the ...
type of operation. So this chart is how to review your project
organization system whether your project is on the function type of
the project or it is truly project-oriented type or what kind of scale
of project these elements will determine what kind of authority and
what kind of authority you need to provide to the project manager. it
has a close relationship to the kind of project itself. Important
things to bear in your mind is in order to carry out the project in a
very healthy and successful manner, both your clients and developers
have to establish common goals. I'll skip the details. Again I will
emphasize how important to establish good communication between client
and developer companies. This is again the chart to review your
project organization system. The top is the use project, from the
user's point of view. The bottom is the vendor project management.
Problem management has to be carried out by both parties. You need to
establish successful communication between the two parties if you wish
to achieve the successful outcome.

Formulation

We will use this kind of formulation to determine whether the project
is operating successfully or not. (Slide 48). P: profit, V: value,
QCD: quality, cost, delivery, M: management. In order to obtain the
profit, you have to have good management, so that you will eventually
come up with a value.

Old versus new

Some of you already said you have some knowledge about project
management thinking. What will be the difference between the legacy
kind of project management and the modern kind of project management?
The legacy or old type of project management relied heavily upon the
personal individual skill and coordination at work site. The essence
of the modern project management is to place the focus on the
mechanism as well as the plan of the project. So in order to do this,
you need to use the project management methodology as your platform
for your activities. And then you will need to add the individual
skill and knowhow, and then again add the organizational knowhow.
So let's skip this page...

Project management standards

So here is the review of the mechanism of project management. This is
the tendency taking place in the US. Recently they use the title
called PMI. Project Management Institute. At the present moment, at
least 50k people are qualified as project management people. P2M is
the first in Japan project management system. It's called Program and
Project Management. At the present moment, there is a movement here in
Japan by introducing this PM standard or criteria to South East Asia
countries as well as to China so as to encourage the system engineers
to be qualified with these qualifications.

If you imagine what is the project management, then you can imagine
driving your car. In order to drive your car, you need a driver's
license, which is like the qualification. Methodology is like the
driving rule, like stopping at red signals. I noticed there are many
people who don't stop even when the color is red. Risk management is
just like when you are driving a car and you encounter a car and you
do not see the road in front of you. It is the same thing when you are
confronting risk. So why do you need project management methodology?
Using that method, you can stabilize the quality of your work and
decrease the number of unnecessary work you need to carry out.
However, just because you have the methodology, it doesn't solve
anything. You will be asked to continuously review the system.
Otherwise, this method will become just a formality.

When we talk about or think about the characteristic of the
qualification, if you put too much emphasis on the qualification, some
of the engineers have the qualification, but they can't drive the car,
just like a paper driver. Or if you think too much about ignoring
obtaining qualification, that means you are skilled driver, but you
failed to obtain driver's license. So it is better to understand the
qualification is necessary and at the beginning of, everyone is
terrible driver to start with, but as you acquire your experience, you
will become skilled engineers, just like driving your car.

From now on I would like to talk about the human resource development.
When we think about the human resource development, it goes like this.
At the bottom, there is the personal skill. Then we have the three
pillars on top of that. Business, management, and technical. In order
to carry out the successful project progress, it is essential to have
communication ability as well as leadership ability. That exists
within the personal skill. Being a project manager, the technical
skill is the necessary condition, but it doesn't have to be 100% so.

Communication skills

Last chapter is to talk about the communication skill. It is important
to establish good communication with people from the stake-holding
organizations. There are so many different kinds of stakeholders that
exist. You will be asked to establish good relations with all of them.
(Long list from slide 58.) All these people or parties are called
stake-holders. Key to a success of the project is to establish the
good communication with each member of the stake holder.

Are you familiar with this term called stake-holder? (Brief excursion
into explanation of term.)

Structure

What will be the structure for the communication skill? The foundation
starts with the communication of the social life of the individual
persons. Second is the communication to be carried out within the
companies or organizations. The third one is the communication that
takes place within the activities surrounding the project. So your
level of the communication skill is most likely to increase as you go
up the steps. We have a saying in Japan in order to establish good
communication in our daily lives, it is good to have good facial
expression, speak clearly, and act--agility is the key. It is very
important to acquire the listen speak read and write, the basic
essential. This is universal essential things.

In order to carry out the project activities, you need to involve so
many different kinds of communication skills. Skill to discuss.
stakeholder discussion skill. Negotiation skill. Documentation skill.
Presentation skill. Unless you will clear all these communication
skills, you will never become a good project manager. That's why it is
important for you to acquire the skill to be a good communicator, step
by step.

Procedure

This is the process for the establishing communication. Most important
foundation to establish the communication is to have the leadership.
So this page contains the basic of communication process, start with
the leadership and communication plan, formulation of relationship,
consensus to be formed, and maintenance management with related
partners using discussion skill, negotiation skill, documentation
skill, and presentation skill. I will skip a number of the slides
because of redundancy.

Important: include in estimate

Important thing to be remembered is that whenever you will establish
the plan for the project, you have to include the plan for how to
establish the communication with the parties involved. Reason because
many of the failure of the project that we have experienced here in
Japan is derived from insufficient communication plan. Most of the
problem will be ended up and you'll find out the communication manhour
was not included in the whole project manhour planning.

(Slide 66) This is the link of the communication as you will
see the number of the links will increase when you involve more
people. If your project needs 100 people involved, then you need 4450
ways of involvement. In order to avoid that, you have to organize your
project team to be a certain standard. This is one of the examples.
(Slide 67.) In order to determine how many communication man hour is
necessary with 100 people a month, with 2500 people days using 200
thousand hours. We don't have time to calculate. It is very important
to accommodate this information into your project plan.

This is the communication issue that exists among the human beings.
This is an example. (p68). Some people lose their mind and say "That's
not what I said..."

Other difficulties

This is another example. I understand you are all learning Japanese.
One word in Japan has several meanings. That's where your difficulty
comes. This kind of problem often takes place among the Japanese. So
there are phonetical difference between some of the words between what
you think in your brain and what comes out of your mouth can have big
difference. For example, HAshi, chopstick, and haSHI, bridge. If you
have some kind of gap between yourself and the customer, that will
eventually lead to some serious problems.

So we wonder why this kind of communication mistake takes place.
Because there's always a gap exist in the mind of the person you're
talking to because the person's background and skill is different from
yours.

One of the examples of how difficult it is to communicate. Let's say
you had to tell someone the distance between earth and a certain star.
(p71)

Often you come across miscommunication when you talk about database
design with your client. Since that you are system engineer or IT
engineer, you all have great professional knowledge. But if you are
asked to define what is one ppm, you have to use the layman's
definition for your customer. (p72)

Placing yourself in other people's shoes

This is extremely important information when you would like to do
business with Japanese people or Japanese company in the future. To
make sure you acquire the habit of putting yourself in a customer's
position. Every individual person has a sense of value. Even though
your sense of value is the very best, you should not try to push these
ideas to other people. Even though your sense of value is right, if
you take the attitude of pushing too hard or selling your value to
other people, they will close their minds and will not be able to
listen to you. From now on, you may have the opportunity to have
participation in a project. However, you have to understand that the
performance of the project depends on the project manager, and you
will be greatly influenced. And if you happen to take participation in
a particular project, you must do everything the project manager tells
you to do. You have to put yourself in the project manager's position.
You have to acquire the habit of putting yourself in the project
manager's shoes. If you acquire all these skills, then you are most
likely to become the good project manager.

Whenever we think of what is the communication skill.. Communication
skill is your ability to establish human relationship. That's what
communication skill is all about. In order to improve your
communication capability, it is better for you to have a great
interest in other people. Lastly, the communication comes from the
bottom of your heart. Even though your words are not enough, if you're
serious enough to establish communication with others, they will
understand and accept you.

Summary

There are keys to make the project a success. To provide the strong
management skill, provide the stringent control for the project
management skill knowhow and methods... Before you do that, you need
to improve your communication capability. The important message is
here. If you happen to be a horse rider, you don't have to run faster
than the horse. You just need to know how to control the horse. This
is the kind of issue when you become the project manager. You always
have a headache like that.

Things that we've learned from the failure. If you do something you
must not do, that will lead you to a failure. Again, you make failure
if you fail to do the things you have to do. The things you are
supposed to do, and if you do it as you are supposed to do, you can do
what you are supposed to be doing. This is a quotation from the
strategy from the baseball team called Dodgers. Stick to your basics.

Questions and answers

(Thoughts on outsourcing: How to reduce the project cost, as I
explained during the presentation. In the past, our project
development was closed to the Japanese domestic market. Now we have
deals with China, Thailand, Vietnam, India.. For example, major
companies like NEC in Japan. NEC has a software house in China. For
example, this summer, one of the big projects with 3000 man hour went
over to the company in Dairan. Fujitsu, IBM, NTT, they are major
operators in Japan, and they have the science and technology centers
in a place in China. So I'm sure the big-sized project will be much
more outsourced elsewhere. Maybe it will eventually shift over to
Mongolia. =) )

(Thoughts on quality control: ISO 9000 series. CMM not very many.
Within the PMI, there is a special section dedicated for the quality
control, but it doesn't say specifically what you have to do. So the
thinking is in the hands of each organization, what kind of quality
control system you have implemented. However, before you start
thinking about the quality control, you have to first understand if
your organization or team has the project management or not. You can't
just pursue quality control. You have to go through a number of
processes. So it is important for the quality which you will be
expected from system engineer's point of you. Another viewpoint is
applied to the finished project. There are so many different aspects
for quality control management. Because earlier I mentioned it is very
important to establish product planning in the very beginning. That
will become the foundation to assure that which you are developing.)

2. Lecture (JapanTraining#5)

The first gentleman I'd like you to meet is Mr. Hisai, who will give
us a lecture on IT-related project management. Before that, Mr.
Kiniyama is the general manager of the ARC information systems inc
will provide you the outline of the company. We would like to thank
you very much for giving us your time.

The agenda of this afternoon is first Mr. Kiniyama will give us the
outline, then we'll take a brief visit, then we'll hear the lecture
from Mr. Hisai.

Good afternoon everone, I am Mr. Kiniyama from ACS software inc. So
today I am going to give you a lecture for a duration of about 20
minutes, whose title is Software Development Status. I'd like to share
with you the problems and issues we confront on a daily basis. Before
I'm going to give you the detailed explanation, first I'd like to give
you the brief history of the company. The ARC information sstems inc
was first established 18 years ago, and we have a capital of 300
million yen, and we are regarded as an independent software compan.

At the present moment, we employ between 180 to 190 persons, out of
which 130 are full-time, and 50-60 come from our business partners
from outside. Out of the 180 or 190 people working for our company, at
least 80-90% are engineers. Our main business can be divided into
three business categories. First is system development on consignment
basis, then consigment sales of products for general use, then system
integration. At the present moment, I am acting as the general manager
for operating system department, which has 5 department working. I am
in charge of consignment department 5. Within our app sys dept, curr
we have 58 person working, out of which manager and leader number go
up to 13, and we also have business partners. Altogether we carry out
around 30-40 projects a year. Most projects carried out by a team. So
the kind of work we carry out within our org is the joint work
together with the major sys integrators, including NTT, etc.
development of system, including CRM, sales force automation... And
also we carry out various other kinds of operations within our org,
including product dev for manuf, like a packaged type of project, as
well as business systems directly aimed for the end-users.
And from now on I'd like to share with you the kind of prob and issues
we are confronting, and some of the solutions that we came up with. So
maybe you already know, but the business ienvironment surrounding
ourselves is facing difficulty every year, and it is getting worse. So
what we do within the organization to try to break up the number of
the issues and problems into different categogories and try to come up with
countersolution for each problem. The first is how to obtain the
stable orders.

The first thing that we keep in our mind is in order for the company
to stay in the market, it must keep receiving orders. So one of the
way to make the survival and try to receive the stable order is
differentiating ourselves from our competitors and letting our
customers know about that. One of the ways to achieve this is to keep
the price so that the customer is happy with us, and to make sure to
improve our productivity as well as to involve ourselves in offshore
development because everyone wants to have the reasonable price. The
next one is to acquire ourselves with the highest skill engineering
ability as well as the technical performance so that our competitors
are unable to carry out specific business work, by improving our
skills and performance. Another important factor we keep in our mind
is make sure to bring customer satisfaction to our clients, in terms
of delivery date and quality. In order to survive the competition,
this is an important factor. And also another important factor is
obviously I belong to the application systems department and most of
us are engineers, but we will always constantly communicate with the
sales department so that we can understand the needs of the customer
and the market.

The second problem we are facing is the deterioration of
profitability. So I am very unhappy to admit but the profitability of
the company is slowly going down. Not to mention some of the proj are
unable to make any money, but that is a fact. It is going down. So why
are we losing our profitability? It comes from a number of reasons.
One of them is that the order price is going down. The manpower amount
is decreasing. We are facing very severe competition from offshore
development. And not to mention our product delivery is becoming
shorter and shorter in time. Our technologies are becoming
diversified, and there even came about this open source system
requirement. So our countermeasure is to make much more stringent
personal relationship with the business partners not only from japan
or domestic market but also from overseas, as well as project
management, which you will be given a detailed explanation of later on
from Mr. Hisai.

And third problem we are facing is something I personally don't want
to mention. Long hours of work which naturally decrease the motivation
of the team members. And another difficult factor for the team members
is that often your work has to be carried out not in the company you
work in, but in your client organization, which gives you another kind
of tension. And another factor is that when the project size becomes
larger and one simple project needs 40 or 50 team members, you have to
work within this difficult human relationship involvement that might
give you additional stress. And countermeasures for this particular
problem is that we will try to pay attention to what kind of
communication level that people are in, and you will look after each
other's mental state, and you will care for others and they'll care
for you. Another way that the company is paying attention to is to
make sure to have multiple number of meetings with different level of
the members, and this is the place where you can openly talk about
things. We are also promoting individual meetings, including
appraisals. Your mental status will be closely checked and taken care
of.

The fourth problem we are facing is human resource development.
As a part of the human resource development way of doing things,
since we are a software dev company, it is essential for us to
continuously improve our ability in things that are considered
essential. We must always accumulate as much information as is useful,
and we encourage our members to attend seminars. Team members must
have time to learn new things and share them with others. And also, it
is essential to improve the performance and skill of the managers and
leaders, so they need to learn about how to manage the project as well
as to improve their skills on a daily basis.

So all these activies in order to provide solutions to the issues and
problems we are facing, we will try to summarize all these problems
into one problem and we will be sure to set a target, and this target
is broken down into the yearly action plan, and you should set goals,
and check how you are progressing. make sure you are achieving the
goal. So for those department who fail to reach the monthly target
which was broken down from the yearly target, you will be reprimanded
not only by the president but also by the management team.

From now on, I would like you to listen to what kind of way we are
working for projects. First phase is even this first phase, before you
even you start the project. When you go and get the project itself is
considered to be phase one. we engineers pay attention to how the
other department will go and start the negotiations for receiving
orders until the sales department receives the firm order from the
customer. During this phase one, befor ethe company will decide
whether to take this order, or whether this kind of quotation is
adequate or not, it will be discussed with members from all companies
including engineers and salespeople so as to ensure that the project
will bring profit into the company. This decision will be made by
measuring the capacity as well as the level of the project itself,
whether it will be difficult or not. By doing this kind of
comprehensive discussion among all company members, we make sure there
will be no project that will bring no profit into the company, as well
as manage the risk of the company. Once, during the meeting or other
area, you found out that this project may bring some kind of business
risk to the organization, the company will make a proposal to the
client asking for longer time, or dividing the development phase into
two or three different phases.

Second phase after you have received a firm order from customer or
client, then the project plan will be established by the team member,
including the assistance, schedule, cost... If necessary, they will
place the order for the outsourcing. We will always keep in our mind
how to manage the project execution. First, we will establish a
milestone, and we will check where we are now and how we are with
regard to schedule. We will spend quite an amount of energy checking
that.

The third phase is the actual operation and execution of the project
itself. DUring the execution and development of the system, it is
important to clearly understand how the operation is progressing in
the correct manner, because we have so many different kinds of
development models. We have to make sure we know what is necessary to
do. In order to find the problem and issues before it becomes too late
to tackle, we will periodically have meetings, and in those meetings
we will review our progress. Once the problem or issue is detected,
then we will try to make one step ahead before things become too
serious, so it includes notification to customers. We may need to
change our project plan. All of these things will be carried out
during phase three.

The fourth phase is the actual delivery of the product. Our highest
priority is to make sure to deliver the system on time, as well as to
make sure to supply the quality product to the customer. And depends,
case by case, some cases even after we deliver the product to the
customer, we need to provide the other kinds of operational support as
well as training during the implementation phase.

From phase 1 to phase 4, this is so called standard procedure to be
followed in any software development. We are quite unique because we
offer post-project review. What we do first in order to carry out this
post project review is that we will establish a so called evaluation
field containing TQCS. T: Time (delivery, shipment). Q: quality. C:
cost, S. Customer satisfaction. We will make the evaluation sheet as
well as the sheet for each member in the project. All these outcome
from these evaluation sheet will be reflected for the future project,
as well as whether you will take similar project or not. And also, the
outcome of the member evaluation sheet may be used as part of the
company's appraisal, to measure the performance of each worker.

So, well, thank you very much, it was very nice of you to listen to
what I have to say. I have mentioned a few things coming out of the
department of which I am in charge, but all these things are shared by
other departments. The kind of countermeasures I have mentioned to you
this afternoon, we still believe it is not efficient. We hope you can
have a good time with my explanations. I think I have overspent the
time allocated to me, but once again, thank you. My last word is that
I wish each one of you good luck for your future, since all of you
seem so very young, and I myself felt privileged sharing time with you today.

I'd love to hear about any questions, comments, suggestions or links that you might have. Your comments will not be posted on this website immediately, but will be e-mailed to me first. You can use this form to get in touch with me, or e-mail me at [email protected] .

Page: 2004.09.30

Updated: 2004-11-2106:44:1406:44:14-0500

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